Greenwood Company manufactures two products-13,000 units of Product Y and 5,000

Question

Greenwood Company manufactures two products-13,000 units of Product Y and 5,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: Estimated Overhead Cost $ 249,600 $ 162,400 $ 92,000 $ 309,600 Expected Activity Activity Cost Pool Machining Machine setups Production design General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours 12,000 MHs 280 setups 2 products 12,000 DLHs Activity Measure Machining Number of setups Number of products Direct labor-hours Product Y 8,800 Product Z 3,200 40 240 8,800 3,200 13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your answers to 2 decimal places.) Product Y ProductZ Machine setups cost

Explanation / Answer

Machine setup costs are assigned on the basis of Number of setups

Product Y Product Z Machine setup cost 14.29% (40/280) 85.71% (240/280)

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